Marc Faber: The Economy Will Not Return for Years
Tom welcomes an always popular guest back to the program, Dr. Marc Faber.
Marc feels, “The economy is currently in a dead-cat bounce and that peak economic levels seen in 2018-2019 will not come back for a long-time… and by a long-time… years.”
Marc questions the belief that government and central banker actions create prosperity. This may be true in the short-term, but it likely has very negative consequences in the long-term. Governments are not very productive, and most things can be done far more efficiently in the private sector.
Marc discusses how he has seen firsthand the socialist and communist systems of the world and how they are a disaster for personal and economic freedom. He says, “Socialism always brings less freedom and unpleasant rulers.”
The Fed finances the state, and today many people are earning more staying at home than actually working. The government will undoubtedly have to institute further programs to support the populace.
The problem with rising assets is that it further increases wealth concentration. This, in turn, increases social tensions, and this instability can cause further hardships for the populace. It’s vital for a society to due what is right and not do things like make the stock markets go up.
He discusses the changes that have occurred in South-East Asia to create prosperity, particularly over the last twenty years. In terms of relative success, many Chinese are now as prosperous as Americans. Also, China’s infrastructure is quite new and modern in comparison to other countries.
Time Stamp References:
1:10 – Recovery and risks.
2:40 – Long-term Fed Policy consequences.
8:20 – Fed paving the way for more socialism.
11:10 – Money printing, asset prices, and unemployment.
14:50 – Contrasting China Vs. the West
24:10 – Investing where you have an edge.
31:00 – Expectations for gold and silver
36:43 – Book recommendations.
Talking Points From This Episode
• Long-term economic outlook.
• Central banks and government do not create prosperity
• Rising asset prices and wealth inequality.
• Relative prosperity of the Chinese middle class.
The Crowd: A Study of the Popular Mind is a book authored by Gustave Le Bon
Manias, Panics, and Crashes. A History of Financial Crises, Seventh Edition. Authors: Aliber, Robert Z., Kindleberger
The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany By Costantino Bresciani-Turroni
Capitalism and Freedom by Milton Friedman
Capitalism, Socialism, and Democracy by Joseph Schumpeter
Dr. Marc Faber was born in Zurich, Switzerland. He went to school in Geneva and Zurich and finished high school with the Matura. He studied Economics at the University of Zurich and, at the age of 24, obtained a Ph.D. in Economics magna cum laude.
Between 1970 and 1978, Mr. Faber worked for White Weld & Company Limited in New York, Zurich, and Hong Kong. Since 1973, he has lived in Hong Kong. From 1978 to February 1990, he was the Managing Director of Drexel Burnham Lambert (HK) Ltd. In June 1990, he set up his own business, publishing a widely read monthly investment newsletter “THE GLOOM BOOM & DOOM” report highlighting unusual investment opportunities.
Dr. Faber is also the author of several books, including “TOMORROW’S GOLD – Asia’s Age of Discovery,” which was first published in 2002 and highlighted future investment opportunities. “TOMORROW’S GOLD” was for several weeks on Amazon’s bestseller list and translated into Japanese, Korean, Thai and German.
Marc is also a regular contributor to several leading financial publications around the world. Dr. Faber is a regular speaker at various investment seminars and is well known for his “contrarian” investment approach.